Experts discuss the implications of a regulated Internet

As the US Federal Communications Commission (FCC) considers new Internet rules, both users and online enterprises struggle with the potential implications. On July 1, top experts gathered at IESE’s New York center for two panel discussions on Net Neutrality as part of 1st Media & Entertainment Industry Forum. Sponsored by a grant from the Carnegie Corporation, the panel was moderated by William F. Baker, WNET President Emeritus and an IESE professor, and Lorraine Branham, Dean of the S.I. Newhouse School of Public Communications, Syracuse University.

The new rule proposed on May 15, 2014 by the FCC will allow Internet service providers (ISPs) to slow down or speed up data delivery to and from certain websites, effectively creating a two-speed Internet, one with a fast lane for those who can afford it and a slow lane for everybody else. According to Baker, the "intensity and reach" of this controversial issue "is a signal of how colossally important the Internet has become to American life."

Historical Perspective

Tim Wu, Professor of Law at Columbia Law School, coined the expression "net neutrality" in 2002 in reference to a hands-off approach of carriers. "The principle of being able to speak or innovate without centralized permission is key to economic success and as a speech platform," states Wu.

Gene Kimmelman, President and CEO of Public Knowledge, attributed our current net neutrality to an "ethos [that] goes back to traditional regulation of our telecommunications system." He credits our longstanding "culture of non-intervening with traffic" with fostering innovation.

Robert Darnton, Professor and University Librarian, Harvard University, linked modern concerns over the Internet with Gutenberg’s invention of the printing press, the information system that developed around the printed word, and "unforeseen consequences" throughout the history of communications. He spoke of balancing the public good and private interests, and considered the Internet to be a public good just like electricity or water.

Our net neutrality exists through "historical accident," asserted Eric Clemon, Professor at the Wharton School, University of Pennsylvania. "Regulators have a terrible time figuring out how to regulate modern technology," he said.

The concept of a neutral Internet is now on the international agenda: the EU began pushing for net neutrality in 2010. Chile was the first to adopt legislation with the Netherlands and Brazil close behind.

Government Involvement

The panelists examined the FCC’s proposed options regarding Internet services. One option is to create a two-lane (high speed and low speed) broadband system, and the other is to reclassify the Internet as a telecommunications system under Title 1 or 2 of the Communications Act.

Kimmelman expressed concern that "the FCC seems to be going down a path of wanting to be light-handed and deferential but may be walking into a mess." He noted that "opportunities may shrink for innovators who are not in the fast lane."

A light touch is Wu’s preference, believing the FCC should "use Title 2 and step away" by relying on the traditional legal standards surrounding telecommunications. In Kimmelman’s estimation, "there is the fear of legislation and regulation that may be more important for norm setting and steering the marketplace than is given credit." Kurt Wimmer, Partner at Covington & Burling, stressed the need for flexibility in this dynamic age.

Market Implications

An audience member asked if the issue was really just a matter of "paying for pipes," and Baker informed the audience that Netflix and YouTube use half of all the Internet capacity in the country. Wu responded that "Netflix would argue that its popularity justifies a low rate." He wondered if side payments by powerful companies might "insulate and protect them as incumbents."

For Wu, the "danger comes from excessive concentration of power. We’ve let the antitrust laws become too dormant." Kimmelman replied that the issue goes beyond antitrust considerations to the need for an "update that is about appropriate nondiscrimination standards for the telecommunications industry."

The search engines worry Clemon far more than the cable carriers because true freedom of speech on the Internet depends on "search" neutrality. "Monopoly of search does trump diversity of opinion." The challenge, Kimmelman noted, is "there is no FCC to regulate ‘search’."

In Clemon’s view, "a gatekeeper like Apple or Google has control of its ecosystem" and he advocates declaring them monopolies. Because "so many forces are commercial with a monopolistic tendency," said Darnton, "the public should intervene for its own good."

Regulation and Democratic Society

The second panel returned to Gutenberg, with Alex Jones, Director of the Shorenstein Media at Harvard University, likening the communications revolution of the 1990s to giving everyone "their own printing press."

Nathan Newman, Founder of TechProgress.org, expressed support for strong FCC regulations that would lower costs, preserve free speech, and increase access to the "19 million people with no broadband and another 100 million without Internet service."

For John Yemma, Editor at Large of the Christian Science Monitor, the Internet as a forum "to speak and be heard is a tremendous gift that must be protected."Jones described journalism as a public good essential to a democratic society. "I’d prefer a commercial model, but I consider the web a utility. So if there is to be a tax, then it needs to be used to preserve the public good."

As an expert on free speech, Lucy Dalglish, Dean and Professor, Phillip Merrill College of Journalism, University of Maryland, defends the idea of a level playing field. Her deeper concern, like Clemon, is with gatekeepers like Google. Dalglish speculated on the danger of allowing the FCC to get involved with content, a concern echoed by Chloe Breyer, Executive Director of The Interfaith Center of New York, who noted that both demoralizing hate speech and the uplifting community response circulate on social media. Newman stressed that regulating the economic environment is possible without regulating content.

On a global scale, Jones has concerns about privacy issues and data collection. He is also alarmed by governments who use "sophisticated techniques to locate those who oppose them." For Yemma, it is crucial for the United States to avoid the hypocrisy of other countries by ensuring our own system is open and fair.

Returning once again to the printing press, Jones ended on an optimistic note, reminding the audience that "after Gutenberg, it was messy for a long time, but then came the Enlightenment."